France consumer goods

Carrefour, Systeme U in talks to form purchasing alliance

April 27th 2018 | France | Retail | Multiple companies

Carrefour SA and Système U Centrale Nationale SA are in talks to form a purchasing alliance in France, according to media reports on April 25th citing a joint announcement by the companies. Starting 2019 the two French retailers plan to enter into a five-year agreement to negotiate with food and non-food suppliers. Such alliances help retailers negotiate for better prices and terms.

Système U was earlier reported be to considering a similar alliance with Auchan and Casino Guichard-Perrachon SA (Casino), two other retailers. An Auchan spokesman told AFP that the latest announcement did not affect its plans to form a partnership with Casino. The Carrefour-Système U alliance will reportedly account for 35% of the French market, while Auchan and Casino will hold about 22%.

Carrefour is one of France's largest grocery retailer by sales. In mid-January it held nearly 21% of the country's market, according to Kantar Worldpanel, a market research firm. Système U accounted for an 11% share of the French market.

Competition in the French retail market has been increasing, following the entry of Amazon.com Inc, the world's largest online retailer, last month. Amazon has partnered with Casino's Monoprix-branded grocery chain to deliver groceries in Paris. The service will be available to users of Amazon's Prime Now service this year, although the companies have not yet provided an exact launch date.